The Conservative Party has said that, if elected in May 2015, it would introduce a new scheme to assist first-time buyers buy new homes built on brownfield land. To be known as Help to Buy: Starter Homes, the Party estimates it could produce 100,000 sales over the five-year life of the next Parliament.
First-time buyers aged under 40 would be able to buy a home under the scheme at a 20% discount to the market price. If the buyer held the property for five years they would own 100% of the equity, with a sliding scale if the property was sold during this period. We understand buyers would also be able to combine the new scheme with the existing Help to Buy Equity Loan scheme, making homes even more affordable.
In developing homes under the scheme, the home builder would be exempt from payments of the Community Infrastructure Levy (CIL), and off-site S106 contributions, including Affordable Housing, and the units would be exempt from the full zero-carbon standard, thus offering a further cost saving.
The scheme would only be available for brownfield land not already identified in a Local Plan and not in the Plan’s five-year supply. In other words, homes built under the scheme would have to be additional to those already expected to come forward under existing planning arrangements.
HBF welcomes any scheme that is designed to increase the supply of new homes. The scheme put forward at the weekend ticks a number of important boxes.
It would help first-time buyers by improving the affordability of new homes built under the scheme;
It is targeted at new homes;
The scheme is designed to achieve “additionality” - i.e. increase the supply of new homes over and above the levels already planned in Local Plans;
It is restricted to brownfield sites.
However, as with any new policy proposal, many details have yet to be worked out and there are some questions about the scheme’s operation. For example, how will local authorities react to not receiving CIL payments or Affordable Housing contributions and will they be willing to grant planning permissions under the scheme? How will lenders respond to the scheme, including their deposit requirements?
HBF has offered to work with the Conservative Party to help design the scheme so that it is workable for home builders and achieves its desired objectives.
John Stewart Director of Economic Affairs.
Home Builders Federation
London, SE1 9PL
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